Gold Boosting Off Inflation Data

Gold Boosting Off Inflation Data

Gold boosting off inflation data as the Core Inflation report shows higher than expected growth for April. The yellow metal had dipped slightly, down $6 an ounce to $1,885.38, ahead of the report as the dollar firmed, but the bullion is once again challenging $1,900.

The core personal consumption expenditures index jumped 3.1%. It has been forecast to increase 2.9%. This key indicator is used by Federal Reserve officials as an important gauge of inflation, though they watch a number of metrics. As part of its price stability mandate, the Fed considers 2% to be healthy, but has indicated it will allow a higher level if needed to promote full employment.

August gold futures fell 0.2% Thursday to settle at $1,898.50 an ounce on Comex. The front-month contract is up 1% so far this week, heading for a fourth consecutive weekly gain. It’s up 7.4% this month and if it holds those gains is poised for its month since July. Gold gained 3% in April and dropped in January, February and March. Gold climbed $372 — or 24% — in 2020 because of uncertainty about the economy and the pandemic. Currently, the August contract is up $0.90 an ounce to $1,899.40 and the DG spot price is $1,897.00.

U.S. financial markets will be closed Monday for the Memorial Day holiday, which means Friday is the last settlement for the month. Electronic trades made on Comex Monday will post for Tuesday settlement.

Inflation has become a central concern for traders in gold and other safe-haven assets like the dollar and Treasurys after a slew of stimulus to help the global economy recover from the pandemic. Federal Reserve officials signaled this week that the central bank’s monetary policy would continue to be accommodative and that they see inflation as a temporary concern.

Investors will also be watching Friday for the anticipated release of U.S. President Joe Biden’s budget for the 2022 fiscal year, which reportedly includes $6 trillion in federal spending, the most ever.

U.S. initial jobless claims beat expectations last week and reached another pandemic-era low. Applications for new unemployment benefits dropped to 406,000 last week, according to a report released Thursday by the Labor Department. Meanwhile, the Commerce Department left its forecast for 6.4% first-quarter U.S. GDP unchanged in the second reading.

The COVID-19 virus has killed more than 3.51 million people worldwide and sickened almost 169 million. About 20% of the cases — and 17% of the deaths — are in the U.S. The country has about 33.2 million cases, more than any other nation, though its proportion of both new cases and deaths has been declining as more Americans are vaccinated and other countries’ outbreaks worsen.

Front-month silver futures rose 0.2% Thursday to settle at $27.94 an ounce on Comex. The July contract gained 1.7% in the first four days of the week. Silver is up 8% so far this month after gaining 5.5% in April and dropping in February and March. It increased 47% in 2020. The July contract is currently down $0.195 an ounce to $27.745 and the DG spot price is $27.73.

Spot palladium increased 2% Thursday to $2,821.50 an ounce and is up 1.1% so far this week. The metal is down 4.9% in May after jumping 12% in April amid strong industrial demand. Palladium also rose in February and March. It rallied 26% in 2020. Currently, the DG spot price is up $6.50 an ounce to $2,829.00.

Spot platinum dropped 1.4% Thursday to $1,185.70 an ounce and is up 0.8% so far this week. Platinum has decreased 1.6% so far this month after gaining 0.8% in April after trading flat in March. The autocatalyst metal rose 11% in 2020. The DG spot price is currently up $1.90 an ounce to $1,187.60.


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